Seattle Office Space News – April 2017

3/ May 2017

Below are comments and links to news articles and other topics relevant to the Seattle office space market from the month of April 2017.

OFFICE DEVELOPMENTS

Early this month, the Seattle City Council unanimously approved an upzone of Downtown and South Lake Union to allow for taller buildings. In exchange for the ability to go taller, developers will be required to contribute towards affordable housing. The City Council estimates that the most recent upzone will generate around 2,100 rent restricted apartments.

Amazon has released renderings of its newest office project at 2205 Seventh Ave. Designed by Graphite Design Group; the 17 story 405,000 square foot building is designed to look like an urban treehouse. A timeline for completion was not released to the press.

New aerial photos shown here illustrate just how much impact Amazon has had on the Denny-Triangle neighborhood. Amazon has built (or has plans to build) over 4 million square feet in the once lowly populated area.

BUILDING SALES

There were no significant building sales reported in April.

OFFICE LEASES

Although it has not been confirmed, there are rumors swirling in the commercial real estate world that Amazon has its eyes on the 58 story Rainier Square tower. The 1.1 million square foot project on the corner of fourth and union is scheduled to open in 2019. Amazon has been on a leasing spree lately bringing its total footprint close to 12 million square feet in Seattle.

ECONOMY

The Seattle housing market continues to be on fire as area home-price hikes once again lead the nation. The typical single family price rose 12.1 percent as of February (compared to a year ago); more than doubling the average national home price increase of 5.8%.

The new median sale price in Seattle reached a record of $630,800, as a frenzy of well-paid tech workers continue to move into the Seattle region.

In research by Seattle based Zillow, the average renter in Seattle needs a raise of $1,248 per year to keep up with rising rents. The average rent for the Seattle area was $2,100 according to the report.

In a similar report, Axiometrics concluded that the Seattle multifamily market is “solid and stable”. Occupancy rates in the area have continued to remain flat at 95.6 percent even with a continuous supply of units coming online, keeping in tune with rapid population growth.

TUNNEL/VIADUCT

The giant tunnel boring machine Bertha, finally reached daylight this month at Sixth Ave North and Thomas Street where it broke through a five foot thick concrete wall. Bertha will now be slowly disassembled in the rescue pit. Bertha initially began digging its 9,270 foot path in July of 2013 but was plagued with a myriad of delays. Construction on the double decker highway in the tunnel that has now been excavated is expected to finish in 2019. The WSDOT released video and drone footage of the breakthrough of Bertha here.

ARENA

Two groups have submitted proposals for a renovation of Key Arena to the City. The first, proposed by AEG and Hudson Pacific Properties offered a $520 million dollar renovation of the existing structure and would have a maximum seating capacity of 19,200. Oak View Group has also submitted a redevelopment plan with a price tag of $564 million and a maximum capacity of 19,000. A community advisory panel will review the plans and make a recommendation to Mayor Ed Murray in June. The goal is to have a deal by years end. Further details on the groups proposals can be found here and here.

OTHER NEWS

This month during Facebook’s developer conference, Geekwire noticed that many of its latest innovation can be traced back to the Seattle office. Facebook has now been in Seattle for seven years and has surpassed more than 1,000 employees in the Northwest.

Geekwire is also currently holding voting for this years “Geekiest Office Space” which will be announced at the annual Geekwire Awards. The contenders include: Chef, Facebook, Payscale, Salesforce, and Vicis. Photos and voting can be found here.

Finally, the daily Journal of Commerce took a look at the new office for DLR Group at 51 University Street that embraced the open design concept in a historical building. Photos of the space can be found here.

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